Securities Law & Instruments


A variationorder granted to labour sponsored investment fund corporationto permit it to pay co-operative marketing expenses out of fundassets contrary to section 2.1 of National Instrument 81-105 MutualFund Sales Practices.


SecuritiesAct, R.S.O. 1990, c.S.5, as am. S.144


NationalInstrument 81-105 Mutual Fund Sales Practices



R.S.O.1990, CHAPTER S.5, AS AMENDED (the "Act")









(Section144 of the Act)

WHEREASon January 11th, 2000, the Ontario Securities Commission (the"Commission") granted New Millennium Venture Fund Inc., formerly,New Millennium Internet Ventures Fund Inc. (the "Fund") relieffrom section 2.1 of National Instrument 81-105 to make certainpayment to participating dealers in connection with the distributionon Class A Shares, Series I and Class A Shares, Series II ofthe Fund (the "Prior Decision").

ANDWHEREAS the Prior Decision does not provide relieffor the Fund to make co-operative marketing expenses (the "Co-opExpenses) to participating dealers.

ANDWHEREAS the Commission has received an applicationfrom the Fund for an order pursuant to section 144 of the Actto vary the Prior Decision to allow the Fund to make Co-op Expensespayments to participating dealers.

ANDWHEREAS the Fund has represented to the Commissionas follows:

1.The Fund is a corporation incorporated under the Business CorporationsAct (Ontario). The Fund is registered as a labour sponsoredinvestment fund corporation under the Community Small BusinessInvestment Funds Act (Ontario), as amended, and is a prescribedlabour sponsored venture capital corporation under the IncomeTax Act (Canada).

2.The Fund is a mutual fund as defined in subsection 1(1) of theAct. The Fund has been issued a receipt dated January 23, 2002for a prospectus dated January 22, 2002 (the "Prospectus") pursuantto which it currently distributes Class A Shares, Series II.These shares have been in continuous distribution since January12, 2000.

3.As at January 25, 2002, the authorized capital of the Fund consistsof an unlimited number of Class A Shares, Series I and unlimitednumber of Class A Shares, Series II, of which 2,321,113.393Class A Shares, Series I and 7,006,785.744 Class A Shares, SeriesII are issued and outstanding and an unlimited number of ClassB Shares, of which 100 are issued and outstanding as of thedate hereof.

4.The Fund desires to pay for the reimbursement of Co-op Expensesincurred by certain dealers in promoting sales of Class A Shares,pursuant to co-operative marketing agreements the fund may enterinto with such dealers.

5.The fact that the Fund intends to pay the Co-op Expenses directlyout of the assets of the fund is disclosed in the Prospectus.

6.Requiring the manager of the Fund to pay the Co-Op Expenseswhile granting an exemption to other labour funds permittingsuch funds to pay similar Co-op Expenses directly, would putthe Fund at a permanent and serious competitive disadvantagewith its competitors.

7.The Fund undertakes to comply with all other provisions of NI81-105 other than those provisions from which the Fund has beengranted relief.

ITIS ORDERED pursuant to section 144 of the Act that thePrior Decision is hereby varied by replacing representation paragraph5 of the Prior Decision with the following representation:

"NewMillennium intends to pay certain costs of distributing its sharesdirectly to participating dealers. These costs are

(i)a sales commission of 6% of the net asset value per Class A Sharepurchased and

(ii)a corporate finance fee of 0.5% of the gross proceeds raised onthe initial offering of Class A Shares.

NewMillennium desires to pay for the reimbursement of co-operativemarketing expenses (the "Co-op Expenses") incurred by certainparticipating dealers in promoting sales of Class A Shares, pursuantto co-operative marketing agreements the fund may enter into withsuch dealers. New Millennium's intention to pay all these costs(collectively, the "Distribution Costs") out of fund assets isdisclosed in the fund's prospectus."

THISORDER is subject to the following conditions:

(a)the Co-op expenses are expensed by the Fund for accounting purposesin the period in which they are incurred; and

(b)the Co-op Expenses are otherwise permitted by, and paid in accordancewith NI 81-105, except to the extent that the Fund has previouslybeen granted specific relief under NI 81-105.

March22, 2002.

"PaulMoore"       "H. Lorne Morphy"